Japan still has a lot of cash
Over the next year, more than 30 major Japanese firms will begin experimenting with a shared private digital currency to drive digitalization in one of the countries in the world that love cash the most. The organizing committee of the group announced this today.
Japan to start experimenting with private digital currency next year
The group, made up of Japan’s three largest banks, as well as brokerage firms, telecommunications companies, utilities and retailers, will experiment with issuing a digital currency that will use a common settlement platform.
“There are many digital platforms in Japan, none of which are large enough to outperform cash payments,” said Hiromi Yamaoka, a former head of the Bank of Japan who leads the group.
According to him, private banks will be responsible for issuing digital currency in the experiments, although the possibility of issuing a digital yen will not be ruled out. Earlier, the Bank of Japan said it plans to experiment with issuing a digital yen. According to the source, this is evidence that there is a growing awareness in Japan of the need for progress in financial technology.
In Japan, non-cash payments account for only 20% of the total amount of payments. This is much less than the United States (45%) or China (70%). The government is trying to promote non-cash transactions to improve productivity, but without much success. This is partly due to the inconvenience of digital payments, as in Japan various digital platforms compete and remain incompatible with each other, while, say, China is dominated by only a few huge platforms.